Abstract
The decision-making process that results in carrying out R&D activities in the internal, non-internal or combined way involves a series of variables and deserves a more detailed analysis due to its specificities. This need stems from the relevance of R&D activities in the organizational universe, verified more in the last decades, due to the possibility for the formation of the competitive edge. The R&D area represents the organizational unit responsible for converting the body of knowledge that permeates the fabric of the organization into innovation of products and processes aiming to achieve the sustainability of the organization. The change in the profile of the R&D area in recent years, allowed to observe repositioning of this highly technical area, through converting it into a more integrated unit in the organizational world, by more intense interaction with other organizational units, filtering information used in the innovation process. Following the logic of rationality in the theory of transaction costs, evidenced by the dilemma "make or buy?", the R&D activities are analyzed in the possibility to be carried out internally or externally. In many cases outsourcing may occur even across national borders. This paper was created with the aim of examining the case of three multinational companies that have outsourced their R&D activities to Brazil based on a strategic perspective, in order to understand the contextual framework that led to different configurations of the R&D activity in these three subsidiaries, providing new possibilities of design for international management of operations. The results highlight the importance of relations of trust, based on local expertise, regardless of pre-existing or developed, as background for the decision of multinational firms in order to transfer more complex activities such as research and development to the subsidiaries in Brazil. The authors hope to contribute to the debate on the advantages and benefits of the process of the outsourcing of these activities.
Highlights
The expansion of business operations to other countries is not exactly a new fact and neither an innovation
This paper was created with the aim of examining the case of three multinational companies that have outsourced their R&D activities to Brazil based on a strategic perspective, in order to understand the contextual framework that led to different configurations of the R&D activity in these three subsidiaries, providing new possibilities of design for international management of operations
The asymmetry of the information available upon foreign markets highlights the importance of the “make or buy” option, depending on cost and characteristics of human and material resources and on the range of risks involved in the operation of foreign direct investment, such as political and technological risks
Summary
The expansion of business operations to other countries is not exactly a new fact and neither an innovation. The most relevant options for direct investment abroad are: (i) build an own manufacturing plant, (ii) acquire a local company with its own brand and consolidated network of customers, suppliers and partners, and (iii) associate to a local business through a joint venture contract. Each of these alternatives denote advantages and disadvantages, besides resulting in different strategies of action for each of the organizational. Journal of Operations and Supply Chain Management 2 (1), pp 31 - 45, C International Conference of the Production and Operations Management Society units and type of relationships between head office and subsidiary, different forms of knowledge management, capitalization, sharing resources and management autonomy. The asymmetry of the information available upon foreign markets highlights the importance of the “make or buy” option, depending on cost and characteristics of human and material resources and on the range of risks involved in the operation of foreign direct investment, such as political and technological risks
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